Can I edit the state income manually after federal return is done?

[holylotus]

We live in NJ but my employer is in NY. I got 2 W-2's this year, one for NY, one for NJ. The federal taxable income is correct. But when we come to NJ state tax, the income is way higher than it should be (I know NJ taxable income should be higher than federal, but not by that much). But the number is calculated by TurboTax automatically. How can I change that?

[LenaH]

If the amount of your New Jersey income is off by the amount of your W-2, then it should not be changed. Since you are a New Jersey resident, then you will be taxed on all of your income (no matter where it is earned). However, since you are also being taxed in New York for one of your W-2's, then New Jersey will give you a credit of taxes paid to another state. 

This credit reduces your New Jersey Income Tax liability so that you don't pay taxes twice on the same income. However, this is not a dollar-for-dollar refund of the taxes you paid to New York. Per the State of New Jersey, your credit cannot be more than the amount you would have paid if you earned the income in New Jersey (rather than New York).

Please follow the instructions below to compute the other state tax credit for New Jersey:

1. Open your return if you are not already in it.
2. Edit your nonresident New York return.
3. Allocate your wages and/or self-employment income earned in New York State.
   1. On the screen titled New York Income Allocation, answer No since only some of your wages were earned in New York.
   2. If you answered No, the next screen titled Your Form W-2 Summary shows your W-2(s). Click Edit and allocate the wages earned in NY.
4. Allocate any deductions that are attributable to New York. If none, enter zero.
5. Continue through the New York State return until you reach the page titled Let’s Review Your New York Numbers.
   1. Take note of the Amount Taxed by New York State, as well as the Allocate NYS Tax.
6. Edit your New Jersey return.
7. Continue through the New Jersey return until you reach the page titled Credit for Taxes Paid to Another State. Click Work on Credit.
8. The page titled Tell us about the money you earned in New York should transfer over the double-taxed income and any amount of tax paid to New York.
   1. Note: The tax amount will not be the tax withheld from your W-2. It will be the tax you were liable for on your New York return.
   2. If there are any differences from what you noted in Step 5a, enter those amounts under the column Amount if Different.
9. TurboTax will let you know your credit amount on the following screen.

[holylotus]

Hi!

Thanks a lot for answering my question. My income was actually all from NY. I got two W-2s for the same income, one showing NJ tax withhold, the other showing NY tax withhold (I've been working for the same NY employer for years and this is the first time I got two W-2s, which made some trouble). So your answer didn't help me. But thank you anyway.

TurboTax counted my NY income twice in the beginning but it allowed me to delete one of the W-2 later. So the number is correct now.

But TurboTax said it could not e-file our return (I guess due to my two W-2s for the same income?), so we had to mail them. I feel I didn't get all the service I paid for :(.

Please make sure I can e-file next year!

[DianeW777]

Absolutely. You should be able to e-file next year with no issue.  For future reference, if you receive more than one copy of a W-2 from the same employer with additional information such as your situation with NJ and NY state income tax withholding, you must enter all the information in only ONE W-2 when completing your tax return.  In this case you would simply 'Add another state' line in the W-2 to include both state tax withholding.

This should not prevent the use of e-file.